Strong PMI figures bolster Euro
The Euro made a solid start to the new year after data for Eurozone and German manufacturing showed that the Eurozone economy is continuing to expand.
New Year Boost For Euro
As traders return to work after the holiday, the Euro started the year above the 1.20 level against the dollar, boosted by data that showed the German manufacturing Purchasing Managers Index hit a record of 63.3 during the month of December. The report, which was put together by IHS Markit, noted that production growth in the last month of 2017 was at a level that had not been seen since the beginning of 2011, and that Germany had experienced one of the biggest increases in export orders ever recorded.
German goods production increased dramatically at the close of the fourth quarter of 2017, and the rate of growth was the fastest recorded for seven years. According to the report, new order growth in Germany reached its highest level for nearly eight years and the nation also showed historically high levels of business confidence.
EURUSD Live Chart
Manufacturing PMI Strong In Eurozone
The strong manufacturing numbers for Germany were echoed by figures for the Eurozone as a whole, which showed manufacturing PMI of 60.6 in December. That figure is the highest recorded for the Eurozone since records began in mid-1997.
According to the figures, a number of forward-looking indicators appeared to be positive; including those for New Orders, Purchasing Growth and Jobs, and 54 percent of businesses surveyed said that they were anticipating higher levels of production in 2018. The biggest growth area was in the manufacturing of investment goods such as new plant and machinery, indicating increasing levels of business investment in the Eurozone.
The findings for UK PMI showed a drop from November levels, though a figure of 56.3 for December indicates that the manufacturing sector is still expanding.
Although the PMI figures are survey-based, they are taken seriously as economic indicators by analysts and traders, and the overall strong numbers for both the Eurozone and German economies are likely to have an impact in Euro trading in the opening days of 2018.